doglover, the answer must be considered in light of your total portfolio. Since your taxable account is near $2 million, that might affect the answer to your question.
Here are your choices:
1) Put the money into IRA, contributions are non-deductible . You pay tax now on the contributions, but the tax on the earnings is deferred until withdrawal. If later in life, you are in a lower tax bracket, you could convert this money to Roth IRA at a lower rate.
2) Put the money into taxable. You pay tax now on the contributions. The tax on the earnings depends on what you invest in. Dividends from bonds would be taxable at your ordinary rate each year. Dividends from muni bonds would carry no tax for federal, possibly no tax for state. Capital gains for stocks would be taxed only if/when you sell. If your stocks throw off dividends, taxes would be due each year - the rate would depend on if the dividends are qualified or not.
3) Do what Brian suggested and then start contributing to Roth IRA each year.
But what does it matter? You are asking about $5.5k a year in a sea of over $3 million dollars. It seems to me that what you do with this $5.5 won't really matter much.
It seems that your posts are sort of nibbling around the edges. That's ok for awhile. You need time to learn how these things work. But eventually, the question you really need to approach and answer is what to do with the $3+ million. Once you figure that, smaller decisions like this will sort of make themselves.
If much of your money is still in cash, that is the real dragon to slay because your wealth won't keep up with inflation.